New Isuzu Motors Ltd. trucks bound for shipment astatine a larboard successful Yokohama, Japan, connected Sunday, July 13, 2025.
Bloomberg | Bloomberg | Getty Images
Japan's exports successful June contracted 0.5% twelvemonth implicit year, extending the 1.7% driblet seen successful May arsenic deliveries continued to diminution for the 2nd consecutive month.
The alteration successful exports was a reversal of the 0.5% emergence expected by economists polled by Reuters, and comes amid a deficiency of a breakthrough successful commercialized talks with the U.S.
Exports to China, Japan's largest trading partner, were down 4.7%, portion shipments to the U.S. declined by 11.4% twelvemonth implicit year, deepening from the 11% autumn successful May.
The information comes arsenic Japan present faces a 25% "reciprocal tariff" from the U.S. that volition instrumentality effect connected August 1, 1 percent constituent higher than the 24% announced connected "Liberation Day."
Earlier connected Wednesday, U.S. President Donald Trump reiterated that a 25% tariff would use to Japanese imports, saying helium does not expect to scope a broader woody with the country.
Marcel Thieliant, caput of Asia-Pacific astatine Capital Economics, noted that the 11.4% diminution successful exports to the U.S. was the largest since the commencement of the Covid-19 pandemic successful 2020.
Exports — including services — made up almost 22% of Japan's GDP successful 2023, according to the latest information from the World Bank.
Since April 3, Japanese automobiles imported into the U.S. person besides faced a 25% tariff. Auto exports to the U.S. are a cornerstone of Japan's economy, making up 28.3% of each shipments successful 2024, according to customs data.
However, information from the commercialized ministry showed that exports of automobiles, which see cars, buses and trucks, to the U.S. fell 26.7% successful June, extending from May's 24.7% plunge.
Thieliant said that carmakers look to beryllium doubling down connected terms cuts to clasp marketplace share, pointing retired that portion car export volumes to the U.S. roseate by 4.6% twelvemonth implicit year, car export values slumped by 25.3% year-on-year.
"Some of that simply reflects the strengthening of the yen arsenic U.S.-bound exports are typically invoiced successful dollars. But astir of it is owed to terms cuts, with carmakers seemingly absorbing astir each of the 25% U.S. tariff imposed by Trump successful April successful their margins," helium highlighted.
The further tariffs could extremity the export-dependent Japanese system into a recession, analysts antecedently told CNBC.
Japan's system contracted successful the archetypal 4th of the year compared to the erstwhile 4th owed to weakening exports, and different specified contraction volition spot it conscionable the explanation of a method recession.
On July 8, Japan's apical negotiator Ryosei Akazawa reportedly said that immoderate woody indispensable see car concessions for the country.
He besides brushed speech immoderate deadlines, including the U.S.' August 1 deadline, adding that helium would not sacrifice Japan's agriculture assemblage for the involvement of an aboriginal agreement.
U.S. President Donald Trump had taken purpose astatine the country's atom assemblage connected July 1, posting connected Truth Social that Japan "won't instrumentality our RICE" contempt a atom shortage successful the country.
Japan had imported conscionable implicit 350,000 tons of atom successful 2024 from the U.S., with the U.S. being the largest exporter of atom to Japan successful that year.
Japan's hardline stance
Takeshi Niinami, elder economical advisor to Japan's premier minister, said that Japan whitethorn person taken a excessively hardline stance successful tariff negotiations with U.S. President Donald Trump.
"I deliberation from the beginning, Japan didn't judge the 10% [tariffs], adjacent 10%. I deliberation Japan should person analyzed that the 10% is simply a must," helium said connected CNBC's "Squawk Box Asia."
Niinami, who is besides the CEO of Japanese drinks shaper Suntory Holdings, was referring to the baseline 10% reciprocal tariff that the Trump medication had imposed globally, adjacent connected countries that person a commercialized shortage with the U.S.
"If that had happened, we would not person been discussing the 25% [reciprocal tariffs]."
Japanese officials, including apical negotiator Ryosei Akazawa, had been pushing for the removal of tariffs connected Japanese imports to the U.S since April.
However, Niinami did not deliberation that Japan should simply judge the 25% tariff wholesale. "We should springiness the posture that Japan is going to unfastened the country, similar non-tariff barriers connected the information standards of automobiles [and] we should speech astir however to hold connected cultivation products to beryllium imported more."
He did acknowledge, though, that the determination to unfastened up the state to much cultivation products came astatine a contentious time.
Japan's Upper House elections are owed to instrumentality spot connected Sunday, and a Nikkei poll indicated that Prime Minister Shigeru Ishiba's governing conjugation is astatine hazard of losing its Upper House majority. The determination to unfastened up cultivation imports whitethorn alienate farmers, traditionally seen arsenic a enactment base for the ruling Liberal Democratic Party.
"At slightest earlier the predetermination time of July 20, Japan indispensable amusement willingness and the posture to settee and hold with the United States," Niinami said.
English (US) ·